The famous Greek history, Thucydides, had a reputation for dryness that repelled me for years, even though I prefer nonfiction to fiction. But after seeing a wonderful quote from the oration of Pericles cited from it, I decided to slog through it as part of my "re-education of Bunkerman" program. Gosh, I really learned a huge amount from it. The book has insights on the development of civilization, fascinating direct and indirect descriptions of the tribes and cities of ancient Greece, their diplomacy, military arts, personal leaders and political systems.
The dimension I want to dilate on here are its insights on the failures and frailty of human group behavior. Athens was a pure democracy as were the states of its empire. Yes, Athens was an empire with "allies" obligated to provide tributes and military forces on demand. The states of the Peloponnesian league were oligarchies - rule by small groups .... some aristocrats or others. [cf. reason #1 for a war in my blog post of December 2, 2007]. Wartime decisions of Athens were made by the people in the assembly by simple votes. Declarations of war, votes for resources and naming of generals were all decided by the assembly of the people. From the book, this seemed to be about 5-10,000 active participants, perhaps less in most situations. The setting is the Peloponnesian War which ultimately lasted about 30 years between Athens and her empire and Sparta and its Peloponnesian allies such as Corinth.
So how did Athens screw up ?
By year ten, Athens had effectively won the war by (a) defeating the Lacedaemonians [aka Spartans] at Sphacteria and capturing its army, and (b) later defeating and killing their general, Brasidas, in Thrace after his brilliant, but ultimately unsuccessful, efforts to induce revolts in Athens' empire there. Those defeats shocked Sparta and led to a peace treaty - even an alliance - with Athens. One can read the actual treaty in Thucydides. Now a flaw in a democracy apears: a mass delusion by a group of humans.
In year 17 of the war [there were other actions in years 11 thru 16 involving another city, Argos], Athens decided to invade and conquer Sicily, The people were induced by representations of support from some tribes in Sicily and some Athenians desiring the fame and gains of conquest. Alcibiades was a prime proponent of this extension of the war. Hmmm ... lust for fame and glory ... two factors of human error. The people in the assembly fell prey to these hopes and visions of extending their empire and voted huge resources to prosecute the war ... in a far off place.
To keep it brief, in one of the fifteen most decisive battles of the ancient world - the battle of Syracuse against the Athenians - the entire Athenian fleet and army was destoyed. Alcibiades had first been deposed and condemned by the Athenian assembly in one of its vicissitudes and subsequently turned traitor and helped Sparta in aiding Syracuse. The Athenian empire began to revolt and collapse as Athenian ability to control it evaporated with the losses.
Mass delusion and the people deluded by lust for more power by leaders having their own lust for fame and glory - all are shown in wonderful detail in a situation relatively compact and understandable. The dangers of uncontrolled democracy are evident.
PS: The free election of Hitler in Germany is a fine modern example of a failure in democracy.
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49 comments:
interesting post, ive long felt, there shud be some type of test u have to pass before u can vote. but im sure it wud be racially biased or whatever. how about this, if u live in a trailer, u cant vote?
what do u think about this?
well-known stock market commentator this week said, “There’s been no growth in the money supply for two to three years.”
He also suggested that the recent increase in consumer credit is a positive economic development.
Well, here are the facts. At the end of November, the latest date for which data is currently available, the most common measure of the money supply, known as M2, had risen 11.4 percent since November 2005 and 16 percent since November 2004.
(Just in case you wanted to know: The M2 money stock includes currency, coins and traveler’s checks held by the public; balances in commercial bank checking accounts; balances at credit unions; savings accounts and certificates of deposit accounts less than $100,000; overnight repurchase agreements at commercial banks; and non-institutional money market accounts).
A broader measure of the money supply, the MZM money stock, has risen at an even faster rate over the past few years.
As of Nov. 30, MZM had risen 18.2 percent since Nov. 30, 2005 and 20.8 percent since Nov. 30, 2004.
(In detail, MZM includes all of the components of M2 mentioned before, plus institutional money market accounts and greater-than-one-day repurchase agreements).
So, as you can see, the money supply has clearly grown over the past few years.
My guess is that the well-respected economist who made the comments about the lack of growth in the money supply was referring to a different measure of money, known as the monetary base. That’s defined as currency in circulation plus funds held by commercial banks at their respective region’s federal reserve bank (“reserves”).
Although the monetary base also has risen over the past few years, it has grown at a much slower pace than the M2 or MZM money stock. As of Dec. 31, 2007, the monetary base had risen a modest 4.2 percent since December 2005 and only 8.5 percent since December 2004.
So, you’re probably thinking “Why all of the talk about the money supply?”
The answer is this: When the money supply increases, short-term interest rates tend to decline, and when the money supply decreases, short-term rates tend to rise.
In fact, the Federal Reserve adjusts the target rate for the Fed funds rate by affecting the level of the money supply, or more precisely, by affecting the monetary base.
When the Fed seeks to lower the target Fed funds rate — the rate at which commercial banks borrow (overnight) from one another — the Fed increases its purchases of U.S. Treasury securities in the open market.
(Those who follow the Fed may have noticed that the press releases issued by the Federal Reserve following meetings on interest rate policy always begins with statement, “The Federal Open Market Committee decided to... ”. That’s why it’s called the “open market” committee, because it buys securities on the open market.)
Likewise, when the Fed desires a higher Fed funds rate, it sells U.S. Treasury securities.
However, the Fed is not able to set the exact level of M2, MZM or other money supplies, because there are other factors that affect the money supply.
For example, the ongoing credit crunch and large sums of money that commercial banks have lent to financially-strapped businesses and to individuals over the past six months has caused commercial bank reserves to fall — even though the Federal Reserve has increased its purchases of Treasury securities.
As a result of the decline in bank reserves, the monetary base has grown at an anemic rate over the past few months. In fact, the monetary base rose only 1.5 percent during December 2007 from the same period a year ago.
In light of the ongoing credit crises, the Fed will likely need to significantly increase its purchases of Treasury securities in order to increase the monetary base. Many Wall Street economists have recently been encouraging the Fed to take this step in an effort to lower short-term interest rates.
(Note: When the Fed increases its purchases of Treasury securities, the prices of those securities rise as a result of their increased demand and the yields — interest rates — on those securities therefore fall.)
Well, here’s what I have to say about the recommendations of these “insightful” economists. Go ahead, persuade the Fed to increase the monetary base, because one outcome is certain if the Fed follows the desperate advice of these “experts.”
The result will be that the exchange value of the U.S. dollar will plummet and inflationary pressures will skyrocket. Gold prices, already breaking records, will continue to surge.
But, I really don’t care what the Fed does and neither should you, if you have subscribed to our new investment service — The ETF Strategist.
Why you ask? Because I’ve already identified several exchange-traded funds (ETFs) that I’m confident will generate handsome investment returns whether the Fed decides to significantly increase the monetary base or to maintain the money supply near its current level.
In regards to the esteemed economist’s comment regarding the supposedly positive increase in consumer credit, you should consider the following: When the economy is in an expansion mode, an increase in consumer credit is usually a positive development, because such a development indicates that consumers are confident in the future direction of the economy.
To be more specific, when consumers feel good about their employment prospects and their future earning power (that is, salaries and wages), they tend to take out more loans for automobiles, consumer electronic devices and home appliances. They also tend to use credit card debt more willingly for spending on clothing and other personal items, as well as dining out at their local restaurant.
As a result, aggregate consumer spending tends to rise during such periods, as does the total output of goods and services (GDP). That’s because consumer spending accounts for approximately 70 percent of U.S. GDP.
However, when consumers become more fearful of losing their jobs and their confidence in future economic conditions falls sharply — which is exactly what has been occurring over the past two months — an increase in consumer credit should be interpreted as a very negative development.
4 billion for CFC. lol
thats like me betting 20 bucks on the seahawks this weekend.
more creative destruction, NICE!
I really screwed up by not going with the preferred in CFC. Cramer was right and I missed that comment by him whenever he made it. I never really thought about it. And when my friend asked me about it, I missed switching by five mnutes since I was listening to Bernanke, too. Darn.
My average cost is about 7.5 on CFC. Looks like I lose a bit. This is a cost of part-timing my investing now.
M2 is too broad. Money market accouts aren't money - that's savings. Repos - sheesh, that's just leverage, not money.
The monetary base is money, period.
money market accounts include commercial paper assets and large CDs of banks - that's loans, not money.
who wrote that, mern ?
my earlier comment was after reading part way thru.
i guess someone who wants to crucify the common man on a cross of dollars ... hehe ;-)
DELAY OF GAME ...MERN..15 YARD PENALTY FROM THE PREVIOUS SPOT
david frazer from money news.com
they spam me everyday. today was the first time i read it.
thx
spin how to i get the penalty if i am not playing? im in the stands, drunk, talking smack.
;-)
My thinking on CFC was that they'd survive until spring and get taken out at 18 then. But I guess the funding pressure got too great.
I get a C for the general idea but an F for missing the prefered play.
UNSPORTSMANLIKE CONDUCT....MERN...SASSING THE REF!!!...HALF THE DISTANCE TO THE GOAL LINE!!
Telephone companies have cut off FBI wiretaps used to eavesdrop on suspected criminals because of the bureau's repeated failures to pay phone bills on time.
One FBI office had $66,000 in unpaid telehpone bills.
A Justice Department audit released Thursday blamed the lost connections on the FBI's lax oversight of money used in undercover investigations. Poor supervision of the program also allowed one agent to steal $25,000, the audit said.
this is why we need a smaller govt. some honesty wudnt hurt either.
lololol mern has no clue why he got flagged
hmmm perhaps the spinola penalty for the ultra-long post ?
Well, the owner didn't care, but I couldn't help writing replies half way thru.
yes Bman.....unlike you who is semi-retired....and mern who is ....uh.....'lookin for a job'......some of us have to actually work for a livin
PS.....i think Ben did a fantastic job yesterday.....not gonna let wall street cyr-babies push him around
where's frosty? still cryin like a baby cuz hillary came roaring back
what a pussy
computer troubles
hey mern..fat point spreads for the games....sucker bet taking the points?
im up nice on the year betting. i dont see any edges this weekend, so ill likely lay off.
most interesting to me is so many expecting the jags not only to cover but win.
maybe the money line on that game, if it is not over the top on the spread. id bet 150 to win 100 or something like that. but i dont know the money line
ya bud, with cindys raise, im seriously considering retirement. working sux!
I see the minimum bid rate for the Fed's TAF is 3.88% - does that not indicate a 50 bps cut is coming ?
4.25% - .50 = 3.75%
Bud, Mern...who is next on your list of big fins that are going bankrupt?
etfc
:-)
load up!
Which means, alas, a virtuous circle is here at last.
jjc
at these levels on monday a depression had started. man he is amazing
hope the trader types caught the thursday before ops expo misdirection day...wed a great tell that the roll forward would be large and relieve the pressure...$vix formed a nch to work with during ops expo week.
$vix has a little gappa around 21 to take care of, an explosion from there over 25 worth keeping an eye on...tues-thur next week should be a traders treat.
ugh traders treat = investors anguish :-(
Mern I really like you little inflation opservation...why not poll more folks here...like Bud, my bet is he still get's his table dances for a $1 (he only pays every 3-4 dances so still two bits for him), crack ho' humma still a saw buck, the pub links under $20 with a pull cart and evenings rates get's you a hot dog at the turn...what inflation?
MLF59...are we ok to short gold 900back to mid/low 800's?...I'm short but have room to add...need some advice mr hunt, dick ball indeed not an option :)
decent risk/reward there Frosty....only problem now is you have a lot of monkeys getting long...they can push this thing farther than it deserves to be pushed...as Bunky will tell you, sometimes when gold/silver looks best-thats the best time for a short/correction...
Stocks like MCD getting smashed.
With no uptick rule, even the innocent can be taken out & shot by the beefers.
MLF59, thanks...UNG needs a rest as well before it can blast through 40, tons of people early to the trade including yours truely.
seems to me that $950 wil be a good place to sell some physical gold. But I might start laying some out in small bites of 10 coins each beginnning around $920.
I need to cut back quite a bit - my allocation to gold is way over it's target level.
I think selling the coins in small chunks is the way to do it withuot drawing attention to oneself. Sell 10 makes the amounts under $10,000.
I'll start selling some silver bars around $18. Maybe 5 at a time for the same reason.
there are a few dealers within 50 miles around here, so I can spread around the business
Bunkerman, watch yourself...if the fed is reading your posts, the irs could be as well...think I need to bring you out west to the frosty bunker and put you through some security trainging, but I can't risk you disclosing my location...and no, I can't walk to a MCD's to buy the dogs a big mac :)
QID darkdise at day high for the afternoon...Mern if this is your bear market, bears should cover little vs getting caught by the ppt after a good week...friday's have been short at will days for weeks...if this is a bear shouldn't we start seeing friday bear sugar taking after a strong week?
hildog emergency spending plan ... hmmm ???
lol frosty ... I wrote my quarterly tax checks yesterday ... wowza ... hildog has extra $$$ for spend.
where are you Ben?
no recession
lmaooooooooooo
Cramer was funny pounding the Fed ... Fisherville's, Hoenigville's
hae a good weekend ... the end of the end to this madness is near.
RIGL over 27.50 next week blue skies...common man takes what he can get...you boys have a fine weekend...good stuff this week Bunkerman...I can't help but think that Bud would have voted for hitler had he lived in germany at the time :)
sea-pigeons are toast this weekend
brett favre vs hassell-pussy
lay'em
RIGL near 30 the most active today...has a good chance next week.
Bud, thanks, need to start drinking now, only 24 hours until kick off...HAWKS GMEN locks.
just got back from an interview, got an offer, but i dont like working! i passed LOL
keep em up!
good for you mern!!!
taking all the Dogs except..Ill go with the Colts..Good Luck Frosty
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